Correlation Between Nuveen Municipal and Blackrock Muni
Can any of the company-specific risk be diversified away by investing in both Nuveen Municipal and Blackrock Muni at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Nuveen Municipal and Blackrock Muni into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Municipal Credit and Blackrock Muni Intermediate, you can compare the effects of market volatilities on Nuveen Municipal and Blackrock Muni and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Nuveen Municipal with a short position of Blackrock Muni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Municipal and Blackrock Muni.
Diversification Opportunities for Nuveen Municipal and Blackrock Muni
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nuveen and Blackrock is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Municipal Credit and Blackrock Muni Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muni Inter and Nuveen Municipal is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Nuveen Municipal Credit are associated (or correlated) with Blackrock Muni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muni Inter has no effect on the direction of Nuveen Municipal i.e., Nuveen Municipal and Blackrock Muni go up and down completely randomly.
Pair Corralation between Nuveen Municipal and Blackrock Muni
Considering the 90-day investment horizon Nuveen Municipal Credit is expected to generate 0.78 times more return on investment than Blackrock Muni. However, Nuveen Municipal Credit is 1.28 times less risky than Blackrock Muni. It trades about 0.24 of its potential returns per unit of risk. Blackrock Muni Intermediate is currently generating about 0.14 per unit of risk. If you would invest 1,261 in Nuveen Municipal Credit on September 1, 2024 and sell it today you would earn a total of 42.00 from holding Nuveen Municipal Credit or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Municipal Credit vs. Blackrock Muni Intermediate
Performance |
| Timeline |
| Nuveen Municipal Credit |
| Blackrock Muni Inter |
Nuveen Municipal and Blackrock Muni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Municipal and Blackrock Muni
The main advantage of trading using opposite Nuveen Municipal and Blackrock Muni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Municipal position performs unexpectedly, Blackrock Muni can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Blackrock Muni will offset losses from the drop in Blackrock Muni's long position.| Nuveen Municipal vs. Nuveen Amt Free Municipal | Nuveen Municipal vs. Nuveen Dividend Advantage | Nuveen Municipal vs. Nuveen Municipal High | Nuveen Municipal vs. Nuveen Municipal Credit |
| Blackrock Muni vs. MFS Investment Grade | Blackrock Muni vs. Eaton Vance Municipal | Blackrock Muni vs. DTF Tax Free | Blackrock Muni vs. Aquagold International |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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